Temasek, the Singaporean holding company, has invested $120 million in India-based edtech major UpGrad Education in its first-ever round of external funding.
In a press statement, the six-year-old Indian startup said it intended to use the capital proceeds to further strengthen its team, scale its global market operations into the US, UK, Middle East and the Asia-Pacific, bolster its technology and product capabilities, as well as pursue merger and acquisition opportunities.
upGrad works in the post K-12 education space, offering online courses from universities around the globe. It offers over a hundred courses to registered learners based in more than 50 countries through its online platform and intends to expand its graduate and postgraduate degree portfolio in India.
Prior to the funds raised from Temasek, UpGrad had been 100 per cent owned, funded and run by its co-founders Ronnie Screwvala, Mayank Kumar and Phalgun Kompalli. UpGrad is currently at an annual revenue run rate of US$165 million after having crossed its milestone of US$14 million a month and targets to achieve US$2 billion in revenue by 2026.
“upGrade is not quite a unicorn, but we’ll get there soon. Sales are doubling every year and we expect to raise another round of capital in three to six months’ time. Online higher education startups like ours target every person from the time they enter college to the time they retire. The higher education segment has three times the potential of K-12 online learning.”
Boom in Indian edtech sector
In 2020, the Indian edtech industry saw strong financial and strategic investor activity, according to EY’s recent market roundup of online learning platforms. The year was characterized by the highest ever volume of consolidation and M&A activity. “Backed by strong funding, large incumbent platforms chose the M&A route to accelerate their growth and expand into ancillary offerings,” it said.
Homegrown firms like Byju’s and Unacademy have led the trend of driving consolidation in the market as the two most well-funded companies. Byju’s, which is the most valuable company in the sector, has raised $2.77 billion so far. It recently acquired Aakash Educational Tutorial Services in a deal worth nearly $1 billion. Japan’s SoftBank-backed Unacademy has raised $440 million until now, according to data.